BILL Holdings, Inc.

Good afternoon, and welcome to Bill's fourth quarter fiscal 2024 earnings conference call. Joining us for today's call are Bill's CEO, Renee Lazert, President and CFO, John Reddick, and VP of Investor Relations, Karen Sansot. With that, I would like to turn the call over to Karen Sansot for introductory remarks. Karen?

Thank you, Operator. Welcome to Bill's fiscal fourth quarter and full fiscal year 2024 earnings conference call. We issued our earnings press release a short time ago and furnished the related form 8K to the SEC. The press release can be found on the investor relations section of our website at investor.bill.com. With me on the call today are Renee Lacerte, chairman, CEO, and founder of Bill, and John Reddick, president and CFO. Before we begin, Please remember that during the course of this call, we may make forward-looking statements about the future operations, targets, and results of bills that involve many assumptions, risks, and uncertainties. If any of these risks or uncertainties develop, or if any of the assumptions prove incorrect, actual results could differ materially from those expressed or implied by our forward-looking statements. For additional discussion, please refer to the text in the company's press release issued today. and to our periodic reports filed with the SEC, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. We disclaim any obligation to update any forward-looking statements. On today's call, we will refer to both GAAP and non-GAAP financial measures. Please refer to today's press release for the reconciliation of GAAP to non-GAAP financial performance and additional disclosures regarding these measures. Note that at times during this call, We will discuss bill standalone results, which exclude our bill Spend and Expense Management, which was formerly called DIVI, invoice to go accounts receivable, and FINMARC financial planning solutions. Note that we will be revising our key metrics presentation beginning in the first quarter of fiscal 2025 to reflect our evolving product solution set. This new presentation will provide investors with an enhanced view of our integrated platform which includes bill APAR and spend and expense, excluding the financial institution channel. It will also provide an enhanced view of our embedded and other solutions, which includes the financial institution channel, invoice to go, and other solutions. The appendix of our fiscal Q4 2024 investor deck previews this presentation and provides a nine-quarter look back for reference. Now I'll turn the call over to Rene.

Thank you, Karen. Good afternoon, everyone. fiscal 2024 was an important year for Bill. We delivered more innovations to SMBs. We launched our integrated platform, made capital more accessible, and empowered small and mid-sized businesses with insights and control with their cash flow. In addition, we built tight organizational alignment, laying the foundation for future growth. These and future innovations are especially valuable for SMBs as they face an uncertain economic environment. In a world of change, Build is the concept that they can rely on. The steadfast commitment to raising the bar to serve SMBs led to strong financial results. During the year, we delivered strong growth and enhanced profitability as we executed on our objective to be the essential financial operations platform for SMBs. Total revenue for fiscal 2024 was $1.3 billion, up 22% year-over-year, and core revenue exceeded $1 billion for the first time. Importantly, we delivered substantial profitability expansion as non-GAAP operating income totaled nearly $200 million, growing 68% year-over-year, and we were profitable excluding the benefit of float revenue. We achieved these results despite economic headwinds and shifting SMB behaviors we experienced during the year. When challenges arose, we demonstrated our ability to adapt quickly, and we exited the year with a much stronger foundation to scale for the future. In fiscal 2024, we served nearly half a million businesses, moved and safeguarded nearly $300 billion in payment volume, and facilitated more than 100 million payment transactions. Many industry-leading partners, including more than 8,000 accounting firms and top financial institutions, used Bill as an essential part of the tech stack they provide their clients. Our network members increased to 7.1 million of 21% year-over-year as we further build platform capabilities for suppliers. This scale is a direct reflection of the incredible value delivered to SMBs through our products and services. We turn the financial back office complexity that drains SMBs of time and money into simple automated tools that provide visibility and control. We empower SMBs to run better businesses. In fiscal 2024, We launched our integrated platform, incorporating the combined strength of our category-defining bill AP and spend and expense solutions. We then added a data and analytics layer to our platform, providing businesses a comprehensive view of their cash flow. We continue to simplify and personalize user experiences by leveraging AI throughout the platform. In addition, we redesigned our mobile app from the ground up to leverage our evolving platform, making sure our customers can increasingly operate their business, whether in the office or on the go. The value of our integrated platform resonates with SMBs. At the end of fiscal 2024, approximately 11,500 businesses used both our AP and spend and expense solutions, up from 7,200 a year ago. We provide SMBs with fast and secure payment experiences and access to capital. In the past year, we enhanced our foundational infrastructure and unlocked new payment capabilities to drive faster payment speed and more choice. Since fiscal 2018, our platform has processed more than $1 trillion of total payment volume, making us one of the largest providers of fast, affordable B2B payments. Scale is a powerful advantage we have that enables us to innovate faster and better. For example, in fiscal 2024, we launched our new payment engine, leveraging our experience and data for moving more than $1 trillion across hundreds of millions of transactions. This allows us to drive faster payment speed and better manage risk across a multitude of payment offerings, which is critical as we extend our platform. We also started activating supplier engagement by establishing direct relationships with suppliers and enhancing their user experiences. For example, we streamlined the onboarding experience for suppliers who accept international payments and made it easier for them to claim the local currency they want through in-product experiences. From day one, we have made breadth of payment choices a key component of our platform. Behind each new choice, there is an innovative offering, rigorous compliance, and extensive risk management. This year, we enabled local transfer for international payments and FedNow support for instant transfer. In addition, we executed a controlled launch of invoice financing, which is one of our first working capital solutions, and the product exhibited both strong early adoption and repeat usage. We reach SMBs through our direct channel and our partner ecosystem. Our constant focus and innovation enables all types of partners to provide value and achieve tangible results. Accountants have been a core focus area since the inception of Bill. Our innovation has been a critical driver of the rapidly expanding client advisory service practice areas. We partner with accountants to build solutions tailored to their business, and today they represent our largest customer acquisition channel. Our accountant relationships are very sticky and have a very high retention rate. The result is that more than half of our customers are from the accounting channel. A great example of how our platform empowers accounting firms to provide differentiated value is Aprio, a premier national business advisory and accounting services firm founded in 1952. Amber Welbelug, partner of managed services operations, shared, and I quote, at Aprio, we cultivate a growth mindset at every level of the firm. We adopted Bill in 2010 and have grown together over the past 14 years. Today, we have over 25 national locations. Bill is a trusted financial operations leader for over 500 clients and the technology backbone for our client advisory practices, which is the fastest growing part of our business. Using Bill's accounts payable and spend and expense solutions allows us to expand and provide more value for our clients. And having Bill as a recommended part of our client's tech stack allows us to stay ahead of the game for our clients. Just like we empower AFRIO, we enable thousands of accounting firms to provide strategic and differentiated value to their clients. We recently held our sixth annual Build Accountant Partner Council meeting, bringing together industry leaders from some of the most innovative and influential accounting firms from across the country to discuss the state of the profession and financial automation. These accounting firms were excited by the progress we made in fiscal 24 and are energized for the opportunity to expand their business, leveraging Bill's growing capabilities. Together, we are developing joint roadmaps to better serve SMBs, and we are investing behind these opportunities. Some areas of investment for accountants in fiscal 25 include additional multi-entity functionality to help them scale growth, providing more tools for cash flow budgeting, forecasting, and insights, and increasing our sales and support efforts to partner even more deeply with them. Our commitment to SMBs means that we work hard to serve them wherever they are using our robust ecosystem. In addition to accountants, we work closely with financial institutions and software companies by enabling them with embedded solutions for their customers. The core of our ecosystem strategy is about expanding our reach and serving SMBs where they want to do business. laying the foundation to serve customers across different channels over the long term. We've been creating value for years with scalable embedded solutions for financial institutions. Recently, one of our large bank partners easily migrated thousands of customers they acquired through an acquisition onto our white-labeled bill pay platform. This bank is also offering our expense management solution to their commercial customers to help them streamline expenses, automate reporting, and provide more real-time visibility and controls. Regional banks are also looking to provide more value to their customers. One of the largest regional banks recently began to offer a white-label platform and a large suite of payment offerings to do more for their clients. This bank leverages our advanced workflows and our many payment offerings, including pay-by-card, virtual card, and international payments. As we have shared with you, we've been working with one of our top three U.S. bank partners to modify our partnership to fit their evolving needs better. We recently extended our agreement with the bank for an additional three years for them to use our current offering. Consistent with our embedded strategy, we also made our APIs available as part of this contract amendment. Our experience and expertise in serving banks over the last decade plus has informed our overall embed strategy. opened up more avenues to amplify the power of our platform, and translated into fast time to market with our new software partner, Xero. Earlier this year, we announced a strategic partnership with Xero to embed our onboarding and bill payment capabilities in its software. I'm excited that the solution will soon be available in beta to Xero's US customers, which demonstrates our ability to rapidly launch solutions for our partners. More and more, we are seeing strong interest in the market for embedded finance offerings, and our investments and learnings make us well-positioned to support this demand. In summary, we've built a growing billion-dollar business, and we're just scratching the surface of the market potential. There are 6 million SMBs in the U.S. with employees, and they contribute trillions of dollars of GDP annually. The opportunity we are pursuing is immense, and we are confident in our ability to capture it. we are focused on growing into a multi-billion dollar, highly profitable business. In fiscal 2025, we intend to capitalize on the momentum we created in fiscal 2024 and widen our leadership position in the market. Our top priorities are to continue to simplify and enhance our platform experience, to enrich existing payment offerings and deliver new payment options, and to diversify and deepen our ecosystem. In addition to our ongoing platform and ecosystem investments, we are making a number of target investments in fiscal 2025 to support these priorities, including enhancing and expanding existing solutions that increase the value proposition for virtual card, international payments, and working capital, augmenting the experience and go-to-market capabilities for suppliers, delivering new capabilities and deepening relationships with accounting firms, and driving expansion and adoption of our embedded solutions. We have a strong and unique business model that generates multiple revenue streams and a track record of driving balanced growth and profitability. We increase our non-GAAP operating margin every year since our IPO while driving significant growth. With our proven strong cash generation and balance sheet, we are well capitalized to strategically put resources behind these top priorities that we believe solidify and extend our leadership. We believe our category leadership and scale are critical for the long-term growth and profitability of Bill. We are playing offense strategically with our strong balance sheet to prioritize the long-term potential of our business. As we do this, we are keenly focused on capital allocation and balancing investments in the business with return of capital to shareholders. Today, we announced that the board authorized a new $300 million share repurchase program. This reflects the confidence that the board, management team, and I have in our strategy and in Bill as an investment opportunity with significant upside. We are deeply committed to our success and committed to taking actions that deliver value. We are all in for SMBs, and we are all in to win the market that we created. I'd like to thank our customers and partners for the continued trust they've placed in us. And I also want to thank our employees for their constant dedication to serving SMBs and each other. Now, I'll turn the call over to John.